Lawmakers begin looking for ways to fund Maine’s share of Medicaid expansion

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AUGUSTA — Surpluses expected in the next two-year budget cycle could provide a starting point for funding the state’s share of Medicaid expansion, but it isn’t clear whether lawmakers would agree to use that money, or whether Gov. Paul LePage would veto such a move.

But the state’s share of expanding the health insurance program for low-income residents is an estimated $60 million, and the budget surplus is expected to be only about $12.5 million at the end of the coming two-year budget cycle in June 2019. Lawmakers will get a revised budget forecast in April.

The Legislature’s appropriations committee met Wednesday to start work on an official estimate of the costs and savings of Medicaid expansion. So far, lawmakers have offered no ideas about how to pay for it. The expansion funding battle is likely to consume much of the legislative session starting in January.

On Monday, LePage reiterated his opposition to expansion and in a letter to legislative leaders said they would have to find a way to pay the state’s share without raising taxes, cutting programs for disabled and elderly residents, or raiding the budget stabilization, or Rainy Day, fund – which LePage wants to increase to $300 million to lower the state’s borrowing costs. LePage also said he expects lawmakers to eliminate waiting lists for services for disabled and elderly residents before expanding MaineCare, the state’s Medicaid program.

Democrats say the state is obligated to expand MaineCare after it received the support of 59 percent of state voters in a November referendum. After the law takes effect on Jan. 3, the Department of Health and Health Services must apply to expand MaineCare by April 3 and expand the program by July 2, analysts say.

Expansion would provide coverage to about 80,000 low-income residents – those earning less than 138 percent of the federal poverty level, or about $17,000 a year for a single adult and $22,412 for a two-person household.

LePage, a staunch opponent of Medicaid expansion, is unlikely to cooperate by quickly providing data needed to figure out how to fund the state’s share.

The governor has said lawmakers must put questions in writing and that experts from both the Maine Revenue Service, which collects taxes, and the Department of Health and Human Services, which oversees Medicaid, will be barred from appearing before the budget-writing appropriations committee.

During its three-hour meeting Wednesday, the committee reviewed the state’s revenue forecast and the work of its non-partisan Office of Program and Fiscal Review, which has crunched the numbers on health care expansion costs at least five different times when lawmakers considered earlier Medicaid expansion bills. The state’s share of the expansion cost would be an estimated $55 million a year for the fiscal year beginning July 1, and would expand to an estimated $60 million a year by 2021. But that would draw down about $525 million in federal matching funds.

Appropriations committee members focused on how much expansion would cost the state and when it would need the money, and worked on questions for DHHS.

At the top of that list is why DHHS has not provided an accounting for any savings in other state health programs, such as mental health and addiction services for low income residents, that would be recouped if MaineCare is expanded. According to Luke Lazure, an analyst with the fiscal review office, the state spends about $35 million a year on those programs.

“I would like to understand, I would love to see the same kind of detail from the department on what their estimate of costs are, the same kind of detail that (Lazure) just gave us here,” said Rep. Drew Gattine, D-Westbrook, the House chairman of the Appropriations Committee. He said he hoped DHHS officials were at least listening to the meeting Wednesday. “Because I think the goal here is to get to the right number.”

Gattine and other lawmakers said they would put questions in writing, but that the process should be more open-ended because the answer to one question often generates another.

Gattine said he wants to get to a implementation timeline and a plan for rolling out expansion, but some Republicans on the committee clearly backed LePage’s demand that a way to pay for expansion be found first. Neither committee Republicans nor LePage have offered suggestions on how to pay for it.

Democrats noted that they are prohibited from estimating how much the state might save in costs to other programs because of expansion, or how much additional income tax revenue might be generated by the estimated 6,000 health care jobs it is expected to create.

Expansion would also create at least 103 new jobs in DHHS and at least one lawmaker, state Rep. John Martin, D-Eagle Lake, suggested Wednesday some of those jobs should be located in rural Maine and outside of Augusta.

Gattine said the projected two-year revenue surplus of $12.5 million may be a starting point for expansion-funding talks, but that dozens of other proposals will compete for that funding.

Maine State House is the state capitol of the State of Maine in Augusta, Maine, USA.

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